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Last Updated : Nov 23, 2016 05:15 PM IST | Source:

Buy Apar Industries; target of Rs 655: GEPL Capital

GEPL Capital is bullish on Apar Industries has recommended buy rating on the stock with a target price of Rs 655 in its research report dated November 22, 2016.

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GEPL Capital's research report on Apar Industries

Company has strong presence in domestic power sector & especially in power T&D sector. The outlook for transmission sector looks promising due to various government initiatives. In last few years, power generation capacity has grown by 50% whereas a transmission capacity has only increased by 30%. This indicates that transmission capacity has been lagging power generation capacity. This has resulted into a huge transmission capex laid down by government in 12th & 13th five year plan. Government to incur Rs 2.6tn worth of investment in 13th 5 year plan (FY18-FY22), an increase of 44% from 12th 5year plan. Also, other government initiatives like Power for all, UDAY scheme, IPDS & DDU scheme to further improve the health of power sector. Moreover, government step to end PGCIL privileged positions in power transmission sector & allowing participation from private players will further ensure level playing field & thus further increases the scope of business for companies like Apar Ind. Going ahead, management believe that government to award project worth of Rs 500bn in coming quarters & this will augur well for company going ahead.

At CMP of Rs 555, Apar Industries trades at 14.2x its FY17E EPS of Rs 39.2/- We believe revival in power transmission & distribution sector on back of various government initiatives will augur well for Apar Industries. Hence, we recommend BUY rating on a stock price with a target price of Rs 655/-, thus implying 18% upside from current level.

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First Published on Nov 23, 2016 05:15 pm
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